City to take bids on Public Safety Facility construction

Plans to construct the two-story, 57,570 square foot Public Safety Facility are back on track, after city staff came up with a strategy for funding.

POSTEDSeptember 14, 2010 9:35 p.m.

After a four month delay, plans for Turlock’s new, $35 million Public Safety Facility are back on track, following a unanimous Turlock City Council decision Tuesday evening.

The City of Turlock will now solicit bids for the two-story, 57,570 square foot future home of Turlock’s police and fire Departments. Bids will be opened on Nov. 9, with a contract awarded by Dec. 8.

The facility will be built on a 4.6 acre site adjacent to the rebuilt Carnegie Arts Center. The City of Turlock has already acquired all of the land needed to construct the facility, save for the site of Pizza Hut.

Construction is estimated to cost $29.7 million to complete, at a cost of $515 per sq. ft. But given the current construction climate, with projects like the Carnegie Arts Center and the Westside Industrial Specific Plan Infrastructure program coming in one-third below architect’s estimates, the final cost will likely be lower.

As such, the City Council earmarked only $24 million in funding for the project, comprised of $13 million in new redevelopment agency bonds, $3.2 million of existing redevelopment agency funding, $4 million from Capital Facility Fees, $1.3 million in state Proposition 1B grant funding, and $2.5 million from the sale of the existing police department site on Palm Street.

Tuesday’s decision did not authorize the $13 million bond issuance, which hinges on a financial consultant’s assessment of the Turlock Redevelopment Agency’s bonding capacity. The decision did, however, direct city staff to prepare for a bond issuance, which will require a fiscal consultant to look at assessed property values in the Turlock Redevelopment area to determine the agency’s bonding capacity based on tax increment expected in the coming years.

“We don’t get $13 million just because we want it,” said Turlock Redevelopment Manager Heidi McNally-Dial.

The final figure could be $15 million or it could be $10 million; it all depends on the fiscal consultant’s report. The Turlock City Council is expected to vote on the bond issuance on Nov. 23, with bonds to be sold the following week.

In a separate, related agenda item, the Turlock City Council approved appropriating $10,000 to hire outside accounting services to assist with the Turlock accounting department’s existing workload, allowing staff to prepare the bond issuance.

The uncertain nature of the bond issuance was the main reason why the Public Safety Facility was placed on hold. In May, the State of California took $3.3 million in Turlock Redevelopment Agency funding, placing the city’s ability to repay bond debt in question should the state be able to seize revenues.

According to Turlock Senior Accountant Marie Lorenzi, the city’s bond consultants have not found state seizures to be an issue when other cities have gone out to bond. Additionally, a pending November state ballot measure could prevent future state raids on RDA budgets, though the effect that decision would have on the city’s bond issuance remains unclear.

The bond issuance would fully utilize the redevelopment agency’s bonding capacity, according to Turlock’s financial advisors, meaning that future redevelopment projects could only be funded if actual growth exceeds projected growth within the redevelopment agency’s boundaries.

The only other question mark on the city’s funding strategy is the sale of the former police station. The building has not undergone a formal appraisal, but according to City Engineer Mike Pitcock the $2.5 million figure is expected to be accurate.

The city will list the facility for sale immediately, with the sale agreement including a lease back option which would allow the police department to continue occupancy until the Public Safety Facility is completed. Selling the site would affect the plans of the Parks, Recreation, and Community Commission, which has previously expressed interest in repurposing the current police station into a teen center.

After all the details are worked out and bids are opened, the City of Turlock could yet face a funding gap. If that gap does exist, the city will likely borrow from Enterprise Funds to make ends meet, though the council will decide on that strategy at a later date.